Show me the money
Although Hungary is now a full member of the EU, the Hungarian forint (HUF, or Ft) will remain the local currency until 2010 or later. 1 Pound Sterling, at the time of writing, is valued at roughly 327 HUF.
Hungarian banknotes come in denominations of 500, 1000, 2000, 5000, 10,000, and 20,000 forints. Confused by all the zeros? A good rule of thumb is to think of the 2000 forint note as a fiver. Also keep in mind that those 2000 forints buy a round of five pints!
If you bring Pounds or Euros on your trip, you'll have no trouble finding a place to exchange them, but we strongly recommend that you just bring your cashpoint card and obtain cash that way. You'll get the best exchange rate from any of the cashpoint machines that are everywhere in Budapest. (Avoid the money changers that loiter in touristy areas and train stations!) And finally, note that cash is king in Hungary; credit cards aren't as widespread as they are in the UK and Western Europe. Outside of more upmarket establishments your credit card will be of little use.
With the exception of designer clothing, electronics, and other imported goods, Hungary remains dirt-cheap compared with the UK. Here's what you can expect to pay for the essentials:
A word on tipping
Hungary isn't as tip-conscious as, say, the United States, but it's nonetheless a good idea to tip waiters, waitresses and cab drivers the standard 10-15%. Tipping at the bar is generally not practiced. At a restaurant, do not leave the money on the table. You either give the waiter the exact amount of the bill with the tip included, or tell them that you would like so-and-so HUF back out of the cash you give them. If you hand the waiter the money and say 'Thank You' - you will not get any change. That always means 'We're good to go, all done, keep all the change''.